CalPERS returns surplus; tug of war ensues in Lode

Tuesday

Oct 27, 2009 at 12:01 AMOct 27, 2009 at 9:12 AM

SAN ANDREAS - The California Public Employee Retirement System, which had been overcharging local governments and agencies for a health insurance preferred provider plan it manages, is returning the resulting surplus just in time for Christmas.

Dana M. Nichols

SAN ANDREAS - The California Public Employee Retirement System, which had been overcharging local governments and agencies for a health insurance preferred provider plan it manages, is returning the resulting surplus just in time for Christmas.

The two-month "premium holiday" means that those paying for this particular health insurance - whether the employees themselves or their employers - won't get a bill for the insurance for November or December.

CalPERS will use the surplus to pay for coverage for those two months.

And that, in turn, is provoking a pre-holiday spat between Calaveras County Water District employees and the district's managers.

The district plans to keep the approximately $174,000 it would have paid, arguing that the district's ratepayers normally pay for the insurance and should benefit from the premium holiday.

District employees, who are represented by Service Employees International Union Local 1021, say the premium holiday is a windfall, and that since the district is contractually obligated to pay for the benefit, that the cash should go to employees.

"It's not their money," SEIU work site organizer Bill Petrone said of district managers. "It was negotiated on behalf of the employees."

The dollars at stake could pay for more than a few stocking stuffers. The CCWD pays $501.59 a month for the preferred provider organization plan for a single employee. The district pays the full cost for single employees plus 90 percent of the additional cost for couples and families.

"It is not paid by employees. It is paid by ratepayers," said Pat Emerson, director of administrative services for the CCWD. "If you turn around and give that money directly to employees, it is a gift of public funds."

Several dozen CCWD employees showed up at district headquarters Monday to make their case to the district board of directors before the directors went into a closed-door meeting to discuss an unrelated legal dispute.

Petrone told the board that if the money isn't returned to employees in their first paycheck in November, he will be filing grievances on behalf of each employee.

The board agreed to put the matter on the agenda for its Nov. 18 meeting.

But it was clear at least some directors had doubts about whether the premium holiday should result in a payment to employees.

"What about that we paid too much for the prior 10 months?" Director Ed Rich said. "I don't understand."

Local government agencies in the region that offer the CalPERS PPO as a health insurance option vary in how they are handling the rate holiday.

Tuolumne County is dividing the money it otherwise would have paid in premiums among its employees based on how many hours they work. The executive director of the Central Sierra Child Support Agency is recommending that the agency's board pay the amount of the unbilled premiums to employees.

In Lodi, however, the city plans to let the various city departments keep the savings from not paying the premiums for the 49 city employees who chose that health insurance option, Lodi spokesman Jeff Hood said. He noted that Lodi employees pay a flat rate for health coverage regardless of which option they choose and that only 14 percent of the 365 covered employees choose the CalPERS PPO.

At the CCWD, however, the CalPERS PPO is the only health insurance plan offered.